"[A]lthough [employer] argues that there is no evidence of a diminished
earning capacity in this case, we have previously held that the amended
version of ORS 656.273(1) now defines a 'worsened condition' as an
'actual worsening of the compensable condition supported by objective
findings.' * * * * In [Jason S. Palmer, 48 Van Natta 2394 (1996)], we
found that the legislature intended to focus on a worker's physical
condition, rather than on a loss of earning capacity or loss of use or
function in a legal sense. Therefore, it is no longer necessary for a
claimant to prove diminished earning capacity in order to establish a
worsened condition involving an unscheduled body part." (Footnote
omitted.)

On review, employer argues that the Board erred in two respects: (1) The
Board erred in holding that diminished wage-earning capacity is not a required element
of a claim for aggravation of an unscheduled condition. (2) The Board erroneously
"ignored" employer's argument that claimant's evidence showed only a "waxing and
waning" of claimant's symptoms. ORS 656.273(8).

We reject the second argument without further discussion but reverse and
remand on the first ground. We conclude, particularly, that the 1995 amendment to ORS
656.273(1) did not "legislatively overrule" Smith's holding that, to establish a
compensable aggravation of an unscheduled condition, a claimant must prove that the
worsening of the condition resulted in diminished earning capacity.

In Smith, the court considered the requirements for establishing a
compensable aggravation of an unscheduled disability under ORS 656.273(1) (1985).
That statute provided:

"After the last award or arrangement of compensation, an injured
worker is entitled to additional compensation, including medical services,
for worsened conditions resulting from the original injury."

The court concluded:

"A worker may be able to continue to work at a present job but still suffer
a loss of earning capacity to carry on other work in the broad field of
general occupations, see ORS 656.214(5), because of a worsened
condition. That is, in a claim for increased compensation for unscheduled
disability under ORS 656.273, the worker need not show that he is less
able to work in his present employment, but must prove that his symptoms
have increased or otherwise demonstrate that his underlying condition has
worsened so that he is less able to work in the broad field of general
occupations resulting in a loss of earning capacity." Smith,302 Or at 401.

"A worsened condition resulting from the original injury is established by
medical evidence supported by objective findings."

In 1995, the legislature again amended ORS 656.273(1) so that the pertinent text now
reads:

"After the last award or arrangement of compensation, an injured worker is
entitled to additional compensation for worsened conditions resulting from
the original injury. A worsened condition resulting from the original
injury is established by medical evidence of anactual worsening of the
compensable condition supported by objective findings." (1995 amended
language emphasized.)

In Walker, we addressed the significance of the phrase added by the 1995
amendments and concluded that "actual worsening" required proof of pathological
worsening of a claimant's condition:

"[T]he legislature's use of the terms 'actual worsening' was not intended to
include a symptomatic worsening. Under the amended statute, in order for
a symptomatic worsening to constitute an 'actual worsening,' a medical
expert must conclude that the symptoms have increased to the point that it
can be said that the condition has worsened. In other words, ORS
656.273(1), as amended, requires that there be direct medical evidence that
a condition has worsened. It is no longer permissible for the Board to infer
from evidence of increased symptoms that those symptoms constitute a
worsened condition for purposes of proving an aggravation claim."
Walker, 145 Or App at 305 (emphasis in original).

Our analysis, thus, focused solely on "symptomatic" versus "pathological"
worsening. Nothing in Walker suggests that the legislature, in adding the phrase "actual
worsening of a compensable condition," intended to repudiate Smith's fundamental
proposition that, to establish the compensability of an unscheduled condition, the
claimant must prove diminished earning capacity. As employer asserts:

"A 'worsened condition' under pre-1995 law was defined as loss of
earning capacity. The effect of the amendment to the statute was to narrow
the means to prove a 'worsened condition' to an actual worsening of the
compensable condition. It was the second sentence of ORS 656.273(1)
which amended and modified the manner in which a 'worsened condition'
was proved. However, the first sentence of ORS 656.273 was not changed
and the link between the terms 'worsened condition' and 'loss of earning
capacity' was not disturbed."

Claimant argues, nevertheless, that we should affirm because "substantial
evidence [supports] the ALJ's finding of diminished earning capacity." We discern no
such "finding" in the ALJ's opinion and order. In all events, the Board, because of its
assumption that diminished earning capacity was immaterial, did not consider, much less
determine, that matter. We remand for it to do so with respect to claimant's unscheduled
condition.

Reversed and remanded for reconsideration.

1. Before the Board, employer apparently did not contest the sufficiency of Black's
opinion as to worsening of claimant's scheduled condition (hearing loss).

2. Claimant asserts that ORS 656.273(1) does not require proof of diminished
earning capacity with respect to her scheduled disability (hearing loss). Employer does not
dispute that principle. See Fred Meyer, Inc. v. Farrow, 122 Or App at 167 ("We conclude that
aggravations are measured by the same standard that made the condition originally compensable.
An aggravation of an unscheduled injury is measured by increased loss of earning capacity. An
aggravation of a scheduled injury is measured by increased loss of use.").